The Solution To Income Protection Gaps Could Be An App

The Solution To Income Protection Gaps Could Be An App

With its potential to profoundly reshape traditional industries, disruptive technology is justifiably popular among investors, but the reception is considerably more wary among the disrupted—workers who have traded greater flexibility for diminished security.

The sharing economy is rich in opportunities, but for many employees the long-established safeguards enjoyed by previous generations are about as familiar as flip phones. As longevity increases, employment uncertainty grows and job benefits decline, many workers find themselves straddling a perilous income protection gap—the amount of income lost due to disability or premature death of a breadwinner—just as the traditional government safety net shrinks also.

But a solution to this looming crisis may be found in the very technology that disrupted those old certainties: a private-public collaboration on a dynamic app that allows individuals to assess their financial health, accurately project their exposure to the income protection gap, and strategize for their future.

“The stakes are higher,” says David Swaden, Senior Public Affairs Manager, Group Public Affairs for Zurich Insurance Group. “If you think about what income protection literally is, you’re protecting income against disruption. What has changed is that the support available from governments in terms of disabilities schemes—and the support available from workplaces in terms of pensions—is becoming not less generous, but more restricted through fiscal imperatives.”

While younger, healthier workers consistently underestimate their need for income protection planning, older individuals who face greater exposure often treat it just as casually—either due to overly optimistic assessments of their own risk or a blasé assumption about available public programs. So how to transform often passive, “default option” employees into proactive planners for their own future?